Verizon Results Miss Wall Street Estimates as It Loses Subscribers

Verizon Communications Inc. on Thursday reported quarterly results that missed estimates and said it lost subscribers who pay a monthly bill despite the No. 1 U.S. wireless carrier's re-launch of unlimited data plans.

Shares of the company fell 1.7 percent to $48.10 in premarket trading.

Net income attributable to Verizon fell to $3.45 billion, or 84 cents per share, in the first quarter ended March 31, from $4.31 billion, or $1.06 per share, a year earlier. Excluding items, earnings per share was 95 cents.

Total operating revenue fell to $29.81 billion from $32.17 billion a year earlier.

According to Thomson Reuters I/B/E/S, analysts had expected adjusted earnings per share of 99 cents and revenue of $30.77 billion.

Verizon said it lost 307,000 retail postpaid subscribers on a net basis in the first quarter. Analysts on average were expecting net additions of 222,000, according to market research firm FactSet StreetAccount.

Churn, or customer defections, among wireless retail customers who pay bills on a monthly basis, increased to 1.15 percent of total wireless subscribers, compared with the average analyst estimate of 1.03 percent, according to FactSet.

Verizon is struggling to fend off smaller rivals T-Mobile US Inc. and Sprint Corp. in a maturing market for U.S. wireless service.

"They badly missed on every important subscriber metric, and it just underscores that the wireless business is a severely growth-challenged business at the moment," said Craig Moffett, an analyst at MoffettNathanson in an interview.

In February, Verizon announced that it would offer an unlimited data plan for the first time in more than five years.

The company has also pursued revenue streams outside its core wireless business. In February, it said it would buy Yahoo Inc's core business for $4.48 billion, lowering its original offer by $350 million in the wake of two massive cyber attacks at the internet company. The deal brings to Verizon Yahoo's more than 1 billion users and a wealth of data it can use to offer more targeted advertising.

Industry analysts have questioned whether the company will pursue a more transformative deal as its main competitor AT&T Inc. seeks to diversify its business through a planned acquisition of Time Warner Inc. Earlier this week, Verizon Chief Executive Lowell McAdam said he is open to deal talks with companies ranging from Comcast Corp. to Walt Disney Co.

Verizon Communications Inc. on Thursday reported quarterly results that missed estimates and said it lost subscribers who pay a monthly bill despite the No. 1 U.S. wireless carrier's re-launch of unlimited data plans.